Complex credit card offers hard to compare

It's becoming a little bit easier for credit card holders to understand the interest rates and penalty charges they face. That's because regulations that took effect earlier this year are having an impact. But a study released Monday said credit card offers are still far more complicated than a decade ago, which makes it harder for consumers to comparison shop.

The greater complexity didn't arise from a requirement that banks disclose more information to consumers, said Josh Frank, a researcher at the Center for Responsible Lending who authored the study. "It was mainly due to more complexity in terms, more fees, more complex fee structures," he said in an interview.

As a result card offers now regularly include separate listings for balance transfer fees, minimum interest charges, cash advance interest rates, penalty rates and a number of other lines that were added to disclosures in recent years.

Those fees existed on some cards for years, but they've proliferated so that they're now nearly universal, said Ben Woolsey, director of marketing and consumer research for CreditCards.com, a consumer website not involved in the study. As more banks adopted these charges, they were added to more disclosures.

The study looked at the disclosure boxes on mailed credit card offers from the top 25 issuers since 1999. The average box included 13 numbers related to specific terms or dates in 1999 and peaked at 33 numbers a decade later.

Since February, when card regulations kicked in, the average has dipped to 26 numbers. That's better, but still far more than an individual can process, particularly if trying to compare terms between cards to pick the best one, the study said.

And that's without counting the terms of rewards programs, which are generally not included in disclosure boxes.

Consumers who are trying to compare offers can quickly reach information overload if they go point-by-point through different offers, the study said. It noted that some banks and credit unions are able to keep their offers simple by keeping their card terms simple.

The American Banking Association said the study came across "as a less than subtle attempt" to get the government to require banks to issue "plain vanilla products," or cards that carry the simplest terms. That would deny consumers "the benefits of innovation and choice," the trade group said in an e-mailed response.

Woolsey, of CreditCards.com, noted that the language used in credit card offers is really not designed for the people using the cards. The disclosures are "ultimately not for the purpose of consumer understanding, they're really more for legal protection," he said. "It becomes legalese, and it's not highly explanatory."